Why is Bad Credit Bad?

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To get it straight from the beginning, bad credit report only means that you didn't pay your credits and loans on time, it does not mean that you won't get other credits, it just means that some banks will completely avoid you and that others will only give you small credits. But that is a small price to pay for the huge amounts of money that you spent and haven't paid back.

The only entity that is really damaged by bad credit, as I can see, is a large company that needs to have access to large amounts of money fast. If the credits are suddenly and drastically decreased, the company will start losing clients and the income will turn into large debts and the company will eventually have to declare bankruptcy. This is the only bad thing that bad credit can cause. The only one.

For normal people bad credit is like a timeout for a child. You have been a bad boy, now you can't have as much as you did, but you still get to spend money that you don't have and so on. Don't get me wrong, I know that the crisis was bad for many of us, but the crisis had as main cause just this, the fact that many people in the world loaned money and made credits that they couldn't get back. Now it has created a chain effect. People don't have the money to pay the banks back, the banks can't loan money to large corporations that could make a profit from that money, and so the cycle repeats it self endlessly.

Banks that have made it through the crisis offer different program in order to help you get rid of bad credit. The programs mostly include longer credit periods with significantly smaller payments. If you have bad credit, you should at least try talking to the bank and seeing how they suggest that you get rid of this problem. You can also negotiate until a common level is reached. In this way, both you and the bank are pleased.

For the future I strongly believe that people should stop lending money and trying to return the money to the bank. I know it sounds mad and outrageous, but the economy can't get better if we don't help it. The faster we act, the sooner we will be able to start lending money again.

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